The Indian government has launched the Udyam Registration system in an effort to support the potential small and medium companies (MSME). It was introduced on July 1st, 2020. The MSME business owners are the focus of our MSME Udyam Registration platform. Entrepreneurs can register their businesses and take advantage of the government incentives provided to this sector.
Let’s gain an understanding of how Udyam Registration works and assist MSMEs in using the advantages that follow registration.
Udyam Registration: What Is It?
A form of certification is Udyam Registration. Small, tiny, and medium-sized businesses can register with the government thanks to it. MSME receives a certificate of recognition and a special identification number with the aid of this registration.
Such businesses are granted MSMEs licences through this certificate. Not to add, these certificates give businesses the opportunity to profit from India’s MSMEs business sector.
Who Can Register for Udyam?
The production, manufacturing, preservation, or processing of items should be the primary activity of the businesses that are eligible for Udyam Registration. They could also be service providers from the industry.
Therefore, traders cannot register for Udyam Registration if they import, buy, sell, or export commodities.
To qualify as a small, medium, or micro-enterprise and obtain MSME registration, an organisation must, however, fulfil a number of requirements.
The following is a list of the business categories that can be registered with Udyam:
Types of Businesses:
- Micro Enterprises: These companies may invest up to Rs 1 crore. Such businesses can only make a maximum of Rs. 5 crore in revenue.
- Small Enterprises: Such businesses may invest a maximum of Rs. 10 crore. Such businesses can only make a maximum of Rs. 50 crore in revenue.
- Medium Enterprises: For these businesses, the maximum investment is Rs. 50 crore. Such businesses can only have a maximum annual revenue of Rs. 250 crore.
Characteristics Of Udyam Registration
The following is a list of the main attributes of Udyam Registration:
- An online generator creates the registration document.
- There is no documentation involved in the registration process. Increase it; there are no charges.
- Only one registration may be submitted by an enterprise.
- A permanent registration number is generated following the completion of the registration.
- Renewal of registration is not required.
- The GST and income tax identification systems are integrated with the Udyam Registration online platform.
Udyam Registration Benefits for MSMEs
The advantages to which MSMEs are entitled are as follows:
- Exemption from Direct Taxes: Direct tax is not applied to Udyam-registered MSME businesses in the first few years of operation. It depends on the kind of your business, which is a crucial issue.
- Banks’ Allowances for Loan Interest Rates: According to the interest subvention scheme, banks give Udyam Registration firms a 2% interest discount on new or current loans.
- Benefits on Patent and Trademark Fees, up to 50%: By using the Udyog Aadhaar/SSI Reg./MSME certificate, businesses who are registered as MSMEs can receive a 50% reduction on patent and trademark expenses.
- Receiving Collateral-Free Loans: The Indian government offers 2 crore or so in collateral-free loans. All MSME business owners are eligible for this free finance under the CGTMSE Collateral Free Finance programme. Businesses registered under Udyam and having an annual revenue of more than Rs. 250 crores are eligible to benefit from this programme. With an investment of Rs. 50 crores in machinery and plant, you can also take advantage of this programme.
- Easy access to licenses, registrations, and approvals: The government gives MSMEs registered under the Udyam system preference for various licences and registrations.
- Electricity bill discount: The government lowers the cost of electricity for MSME companies.
- Exemption on Up to 1% Overdraft Interest Rate: A roughly 1% interest-free overdraft is available to all MSME-registered enterprises. However, it varies from bank to bank.
Suggested Read: Print Udyam Registration Application
To register their businesses, MSME entrepreneurs can use the paperless and free Udyam Registration platform. For businesses to receive the many MSME incentives, registration is required. Not to mention that it aids in the government’s collection of information on all MSMEs in India.